Travel groups look east for 2012 bright spots

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By Victoria Bryan and Maria Sheahan / Reuters

BERLIN: With a weak western European economy, fear of political unrest in North Africa and a cruise business hit by the Costa Concordia disaster, travel groups are looking to eastern Europe, China and corporate travel to brighten up 2012.

The United Nations World Tourism Organization (UNWTO) expects global arrivals of international travelers to increase by 3-4 percent this year, after a 4.4 percent increase to 980 million in 2011, with growth driven by emerging markets.

“The whole world is skewed to the East. This is the New World,” Taleb Rifai, secretary general of the UNWTO told Reuters in an interview at the ITB Berlin travel fair.

Officials from the tourism ministries of Tunisia and Egypt, which are struggling to encourage tourists back after uprisings, said Russian tourists were now the leading visitors to their countries, and that they were keen to attract Asian travelers.

China is expected to account for 100 million arrivals by 2020 as the country’s booming economy translates into corporate investments outside China and into rising wealth for the broader population, according to the UNWTO.

German travel group TUI AG, the owner of Europe’s largest tour operator TUI Travel, will bring its first groups of Chinese tourists to Europe in the summer on a package tour of Europe’s cities.

“We’re calling it the tour of the Museum of Europe,” CEO Michael Frenzel said, highlighting that TUI is the only European tour operator to have a license to organize international travel for China.

Frenzel said spending on foreign holidays by travelers from Asia-Pacific was expected to reach €349 billion ($463 billion) by 2020 as it grows at an average rate of 10 percent a year, compared with growth of 4 percent for Europe.

Spending by Chinese tourists is the fastest growing in the world, having jumped 38 percent last year, followed by Brazil, India and Russia, according to UNWTO data.

“If you’re a hotel owner in Berlin, you want the Chinese to visit,” said Hubert Joly, chief executive of hotels and business travel group Carlson.

Business in person

Business bookings are also expected to buoy demand this year as companies maintain their spending on trips in order to seek out new growth markets.

“One of the lessons from the crisis is that in order to conduct business you need to travel,” Carlson’s Joly told Reuters at the IHIF hotel fair in Berlin.

“Take the example of Athens. You couldn’t solve the Greek crisis on a conference call,” he said, adding that staff flying in from the International Monetary Fund and the European Central Bank had helped keep hotel occupancy rates strong in Athens.

German flagship carrier Deutsche Lufthansa said it expected business class bookings, on which airlines commonly make most of their profits, to remain stable this year.

“We know that the euro crisis and factors of economic instability have arrived in the real economy. But overall the current booking figures show that demand for business travel is relatively stable,” Jens Bischof told journalists at the ITB.

Frits van Paasschen, CEO of hotel chain Starwood, said the pipeline of new hotels reflected rising corporate travel to eastern Europe.

“We’re investing especially in the resource-rich countries, because that’s where much of business is travelling,” he said, citing new hotels in St. Petersburg in Russia, and Baku in oil-rich Azerbaijan.

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